DoD's $157M B-2 Contractor Logistics Support Contract Awarded to Northrop Grumman
Contract Overview
Contract Amount: $157,163,058 ($157.2M)
Contractor: Northrop Grumman Systems Corp
Awarding Agency: Department of Defense
Start Date: 2017-03-01
End Date: 2020-02-29
Contract Duration: 1,095 days
Daily Burn Rate: $143.5K/day
Competition Type: NOT COMPETED
Pricing Type: FIRM FIXED PRICE
Sector: Defense
Official Description: IGF::OT::IGF B-2 CONTRACTOR LOGISTIC SUPPORT
Place of Performance
Location: PALMDALE, LOS ANGELES County, CALIFORNIA, 93550
Plain-Language Summary
Department of Defense obligated $157.2 million to NORTHROP GRUMMAN SYSTEMS CORP for work described as: IGF::OT::IGF B-2 CONTRACTOR LOGISTIC SUPPORT Key points: 1. Significant contract value for specialized aircraft support. 2. Sole-source award to incumbent contractor raises competition concerns. 3. Potential for cost overruns due to lack of competitive pricing. 4. Focus on critical defense asset sustainment.
Value Assessment
Rating: questionable
The contract value of $157M over three years for logistics support is substantial. Without competitive bidding, it's difficult to assess if this price represents fair market value compared to similar specialized support contracts.
Cost Per Unit: N/A
Competition Analysis
Competition Level: sole-source
This contract was not competed, indicating a sole-source award to Northrop Grumman. This limits price discovery and potentially leads to higher costs for taxpayers as there was no competitive pressure to reduce the bid.
Taxpayer Impact: The lack of competition may result in taxpayers paying a premium for these essential logistics services.
Public Impact
Ensures continued operational readiness of the B-2 bomber fleet. Supports high-skilled jobs within the aerospace and defense sector. Highlights reliance on prime contractors for complex weapon system sustainment.
Waste & Efficiency Indicators
Waste Risk Score: 50 / 10
Warning Flags
- Sole-source award
- Lack of competition
- Potential for cost creep
Positive Signals
- Ensures critical asset availability
- Supports experienced contractor
Sector Analysis
This contract falls within the aerospace and defense sector, specifically supporting a major strategic aircraft platform. Spending benchmarks for contractor logistics support can vary widely based on asset complexity and age.
Small Business Impact
The data indicates this contract was not awarded to small businesses. The prime contractor, Northrop Grumman, is a large aerospace corporation, suggesting limited direct opportunities for small businesses on this specific award.
Oversight & Accountability
Oversight would focus on ensuring Northrop Grumman meets performance requirements and that costs are reasonable, especially given the sole-source nature. The Defense Contract Management Agency (DCMA) is responsible for this oversight.
Related Government Programs
- Aircraft Manufacturing
- Department of Defense Contracting
- Defense Contract Management Agency Programs
Risk Flags
- Sole-source award limits price competition.
- Potential for cost overruns due to lack of competitive pressure.
- High reliance on a single contractor for critical asset sustainment.
- Limited transparency into cost drivers without competitive bids.
Tags
aircraft-manufacturing, department-of-defense, ca, delivery-order, 100m-plus
Frequently Asked Questions
What is this federal contract paying for?
Department of Defense awarded $157.2 million to NORTHROP GRUMMAN SYSTEMS CORP. IGF::OT::IGF B-2 CONTRACTOR LOGISTIC SUPPORT
Who is the contractor on this award?
The obligated recipient is NORTHROP GRUMMAN SYSTEMS CORP.
Which agency awarded this contract?
Awarding agency: Department of Defense (Defense Contract Management Agency).
What is the total obligated amount?
The obligated amount is $157.2 million.
What is the period of performance?
Start: 2017-03-01. End: 2020-02-29.
What is the justification for the sole-source award, and were alternative competitive strategies considered?
The justification for a sole-source award typically stems from unique capabilities, proprietary technology, or the need for continuity of support for a complex weapon system. Agencies must document why full and open competition is not feasible. Alternative strategies might include phased competitions or seeking proposals for specific components if feasible, though for highly specialized logistics, sole-sourcing is often deemed necessary.
How is the government ensuring cost reasonableness without competitive benchmarking?
The government relies on robust contract administration, including cost analysis, audits, and performance monitoring. For sole-source contracts, agencies often use historical pricing data, should-cost models, and independent government cost estimates to validate proposed prices. Negotiation strategies are critical to achieving fair and reasonable terms.
What are the long-term implications of relying on a single contractor for critical logistics support?
Long-term reliance on a single contractor can lead to vendor lock-in, reduced innovation, and potentially escalating costs over time. It also concentrates risk, as the government becomes highly dependent on that contractor's performance, financial stability, and strategic decisions. Periodic reviews and market research are essential to identify potential future competition or alternative support models.
Industry Classification
NAICS: Manufacturing › Aerospace Product and Parts Manufacturing › Aircraft Manufacturing
Product/Service Code: SUPPORT SVCS (PROF, ADMIN, MGMT) › PROFESSIONAL SERVICES
Competition & Pricing
Extent Competed: NOT COMPETED
Solicitation Procedures: ONLY ONE SOURCE
Pricing Type: FIRM FIXED PRICE (J)
Evaluated Preference: NONE
Contractor Details
Parent Company: Northrop Grumman Corporation
Address: 3520 E AVE M, PALMDALE, CA, 93550
Business Categories: Category Business, Corporate Entity Not Tax Exempt, Not Designated a Small Business, Special Designations, U.S.-Owned Business
Financial Breakdown
Contract Ceiling: $254,350,845
Exercised Options: $189,859,614
Current Obligation: $157,163,058
Subaward Activity
Number of Subawards: 22
Total Subaward Amount: $1,274,114
Contract Characteristics
Commercial Item: COMMERCIAL PRODUCTS/SERVICES PROCEDURES NOT USED
Cost or Pricing Data: YES
Parent Contract
Parent Award PIID: FA861614D6060
IDV Type: IDC
Timeline
Start Date: 2017-03-01
Current End Date: 2020-02-29
Potential End Date: 2020-02-29 00:00:00
Last Modified: 2024-09-25
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